Saturday, August 17, 2024
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Hoteliers Welcome GSA’s fiscal year 2025 An increase in daily allowances as well as higher accommodation and meal allowances are intended to increase the industry’s revenue and support federal travel.
Kevin CareyInterim President and CEO of American Hotel and Lodging Association (AHLA), reacted to the recent announcement of the General service management (GSA) on the per diem rates for federal employees in fiscal year 2025. These rates determine the reimbursement of lodging and meal expenses incurred by federal employees during official government trips.
Effective October 1, 2024, the daily lodging allowance will increase by $3 in most regions of the continental United States, to a total of $110 per day. This increase is expected to generate approximately $100 million in additional revenue for the hotel industry. In addition, the meal and incidental allowance will increase by $9, to $68 per day, the first adjustment in this category in three years.
“These increases are an important victory for AHLA, which has made fair per diem rates a permanent priority at the federal level on behalf of our members,” said AHLA Interim President and CEO Kevin Carey. “Government travel is an important source of revenue for hotels, and it is critical that federal per diem rates reflect market conditions and take into account the economic realities hotels face, including the ongoing impact of inflation and nationwide labor shortages. We appreciate the work that GSA Administrator Robin Carnahan and the Biden administration have done on this issue.”
overview
Each year, the General Services Administration (GSA) sets per diem rates to cover the cost of lodging and meals for federal employees while traveling on official business within the continental United States. These rates are critical to ensuring that federal employees are adequately reimbursed for their travel expenses. The American Hotel & Lodging Association (AHLA) plays an important role in this process and works closely with the GSA to ensure that per diem rates strike a balance between the interests of hoteliers and the government.
To determine these rates, GSA typically uses a formula based on the average daily rate (ADR) for room and board over a 12-month period and then subtracts five percent from that amount. This method allows it to set rates that reflect current market conditions while remaining financially responsible.
For fiscal year 2025, the standard per diem rate for most regions of the continental U.S. has been set at $178. This total includes a flat rate of $110 for lodging and $68 for meals and incidentals. These figures reflect GSA’s efforts to align per diem rates with the economic realities of the government’s travel needs while ensuring that hoteliers are fairly compensated for their services.
